Fischer leaves economy without responsible adult

The big question is how Netanyahu will be able to calm the markets in the days ahead.

Israel's capital market, and apparently the entire economy, was stunned by Governor of the Bank of Israel Prof. Stanley Fischer's resignation and immediately drew the inevitable conclusion: the country's economy is left without the responsible adult just when things are going to be difficult in terms of fiscal policy.

Although Fischer is due to leave in five months, and until then he promises that he will "continue to deal fully with all matters pertaining to the Bank." But the markets have already reacted to what appears to them to be a very problematic situation, when it is still unclear what the policy direction will be, who will be the finance minister, and who will succeed the departing governor. Prime Minister Benjamin Netanyahu's reputation as far as decision-making and judgment are not at their peak, to put it mildly; hence the worry about what is liable to happen to the economy.

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Under these circumstances, in the coming weeks and months, Netanyahu will try hard to present a kind of determination to prevent, as much as possible, zigzags. But the political negotiations to form a coalition are liable to cause the public to miss Fischer in the months before his official departure.

The big question is how Netanyahu will be able to calm the markets in the days ahead. He may be forced to appoint a new finance minister, a man who will be acceptable as able to lead fiscal policy and who has the public and political stature needed to pass the budget in the Knesset with a minimum of conflict and with as much support as possible.